Citigroup Inc. (NYSE:C) has scrapped plans to sell its Mexican consumer unit, Banamex, and will instead list it in 2025. The surprise move delays the bank’s overhaul and is likely to cause investor anxiety due to the country’s leftist president.
Citi is considering a dual stock listing, possibly in Mexico City and New York, for the unit. The bank had been in talks to sell Banamex to Mexican billionaire German Larrea’s conglomerate Grupo Mexico, but tensions between the conglomerate and Mexican President Andres Manuel Lopez Obrador led to the deal being abandoned.
Citi first bought Banamex in 2001 for $12.5 billion and announced in January 2022 that it would exit Mexico. The sale was part of a broader overhaul at the U.S. No.3 bank, which has struggled for years to gain scale and profitability from a myriad of businesses worldwide.
It remains unclear what investor appetite would be for such a deal, especially given the Mexican government’s opposition to layoffs that could be needed to make the unit more competitive. Citi CEO Jane Fraser said in a statement that the bank had decided an IPO would be the best path to “advancing our goal to simplify our firm.”